Value of Daycare Services at the Workplace

Authors
Dr. Nadia Al-Alawi
Geographic Area
National
Year Of Publish
2016
Funded by
Norwegian Embassy in Jordan
Type of research
Quantitative
Research Area
Policy, Programmatic/systems, Service Delivery/Operational,
Abstract

Executive Summary

Despite having an overly educated female population, Jordan suffers from a dismal labor participation rate for women in the workforce of 13.3% in 2015 compared to men’s 60%. As such, considerable efforts are made to boost women’s participation in Jordan’s economy as research points to benefits amounting to the equivalent of nearly 46% of GDP from closing the gap in gender participation in the workforce.

Economic literature sites the burden of childcare as one of the obstacles against higher participation of women in the labor market. A study by the Higher Population Council shows that about 45% of all women who leave the workforce attribute it to family circumstances and the burden of childcare. To address this issue, Article 72 of Jordan’s Labor Law No. 8 of 1996 and its amendments sets forth the conditions upon which an employer must establish a daycare service at their workplace. However, upon observing implementation of Article 72, multiple issues emerged that counteracted the intended goal behind that article. For example, some companies refrain from recruiting women to prevent the application of Article 72 on their establishment.

Given the aforementioned challenges, this research paper will attempt to develop an understanding of the preferences of employees towards a daycare service in particular and their workplace in general. More importantly, this paper will attempt to place a numerical figure on the value employees place on having a daycare service at their workplace and provide commentary on the appropriate public policy in response to the results.

Following economic literature, this paper utilized the use of the Contingent Valuation Method to quantify the value of daycare services in the workplace. This method was conducted using an online survey that asked respondents, in a referendum style, about their stated value for daycare services in their workplace through asking them how much they would be willing to contribute to establish a daycare service at their workplace. In addition to the above, the survey contained questions that aim to develop an understanding towards the respondents’ preferences towards different workplace attributes and different daycare attributes.

This study uses the telecommunications sector as a case study given its high prevalence of women as a share of its employees as well as their technological literacy, which assisted in the completeness of the survey responses collected electronically as part of this research.

This paper shows that employees within the telecommunications sector, and within the sample surveyed, place a high value on daycare services at their workplace. Daycare services were found to be the most important attribute among other

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Workplace attributes such as extended paid maternity leave, equal pay for work of equal value, and flexible working hours.

Furthermore, the paper finds that, among several different possible traits for a daycare service, the most important trait the respondents looked for was proximity to the workplace followed by excellent hygiene and safety and having the same opening hours as the workplace. These choices reinforce the previous conclusion that employees highly prefer having a daycare service at their workplace.

The majority of respondents placed a value between JD 51 and JD 100 per person per month on daycare services at the workplace. The average value was estimated at JD 52.2 per person per month or the equivalent of JD 627 per employee per year. This value represents a direct benefit to the employer as it can be thought of as foregone salary increases or a non-monetary benefit provided to its employees. Such benefits may be provided, with appropriate public policies, at a cost lower than the stated value yielding a net benefit for the employer. Furthermore, this value does not capture the improved productivity of workers as a result of reduced absenteeism as well as the savings from reduced turnover of employees that are likely to result from providing a daycare service at the workplace.

The value of a daycare service was most pronounced for respondents who either had children under the age of 4 (and as such would need a daycare service) or respondents who held a master’s degree. Moreover, contrary to expectations and common beliefs, male respondents valued the daycare service at their workplace at JD 49.8 per employee per month.

 

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